A crackdown on welfare while the richest pay no tax? It's one promise the Liberals kept

There are three reasons the government will not suspend the system issuing faulty debt claims to welfare recipients

The Liberals’ much talked-about election “plan” to redress their own financial ineptitude was merely to cut spending, like this data-matching “crackdown”, which is supposed to yield the bottom line a cool $2bn.
Photograph: Colin Brinsden/AAP

On Wednesday, Australia found out that only a few days before Christmas, a low-income single mother was hit with a wrongful debt notice from Centrelink, demanding she front up to them with $24,000 in “recovery fees” for a supposed overpayment.

She was a victim of Centrelink’s new automated “data-matching” compliance system, in which Centrelink and the Australian Taxation Office cross-reference their records, to see who is earning what where, and how earned income might affect their eligibility for income support, like the dole.

There have been calls to suspend the system, because the computers are making shocking mistakes. The woman mentioned above found herself subject to the wrongful notice because she’d recorded the name of her employer slightly differently in two different documents. The automated system decided that she was working for two different employers. So the experience of being on welfare in Australia – which is onerous in its reporting, punishing in its obligations and impoverishing in its conditions – became anxious and terrifying for an entire family at an expensive and stressful time of the year.

Are the government likely to heed calls for the faulty system’s abolition? Highly unlikely, and for three reasons.

Firstly, data-matching was actually a “cornerstone” of the Coalition’s final budget costings before the July election. Howling about a “budget emergency” before their 2013 election, the Liberals and Nationals insisted that only their economic management of could rescue the economy. Over the intervening four years, their economic management has consisted of a debt that has ballooned by the billions.

Spoiler alert: their much talked-about election “plan” to redress their own financial ineptitude was merely to cut spending, like kicking elderly Australians off the pension, defunding legal centres and this data-matching “crackdown”, which is supposed to yield the bottom line a cool $2bn.

Second, while the government is instilling terror into pensioners, single mothers and the unemployed with labyrinthine obligations around Centrelink payments, it can pretend it is doing something about the growing debtwithout addressing any of the real reasons it keeps getting bigger.

Like how income tax revenue is not increasing its contribution to government coffers because under four years of Liberal/National “management” wage growth has hit a record low. Wage growth is now a full percentage point lower than during the global financial crisis, and as a result real wages have not grown in three years. Three years.

And how has the government sought to redress these problems? Oh, with an aggressive fight against wage increases for public servants, stealing a failed overseas scheme in which young workers will take adult jobs for $4 an hour and flattering the business lobby’s attempts to cut penalty rates and abandon the minimum wage.

Income tax is not, of course, the only means of raising revenue. There’s company tax, too. Alas, the stated priority of the Turnbull government before the election was a $50bn tax cut to big business – a gift of some generosity when such a large number of corporations pay no tax anyway.

In October, the Guardian revealed that the government was forgoing “billions of dollars” of potential revenue from a failure to properly apply a petroleum resource rent tax to liquefied natural gas exports. And the government knew a year ago that 585 companies, each with $100m or more of annual turnover, were paying no tax.

Why non-tax-paying corporations that include ExxonMobil, Lend Lease, Glencore, Virgin or Mitsubishi need further tax breaks is as open a question as that which asks why the government will “crack down” on welfare recipients when 27 individual Australian millionaires paid close to no income tax in 2013-14 despite rustling together a combined $46.7m for the cost of “managing their tax affairs”. Or why the government has gone after part-pensioners when it is maintaining superannuation tax concessions for the super rich that’s costing the budget $35bn in tax revenue a year.

Unless, of course, we can all grasp the third reason for the unfairness: it’s what the Liberals and Nationals prioritise.

And, frankly people, it’s not going to while the Coalition remain in power. The belief that taxes are “burdensome” and that the political mission is the “encouragement and facilitation of wealth” is not some partisan accusation against the Liberal party – it’s their explicit commitment. They will phrase it as they must to get elected, but theirs is a mission to defend the wealthy people and corporations; the poor, the vulnerable, the struggling – hell, even the merely ordinary – do not come into it.

Be outraged at the unfairness, but don’t be surprised – it’s the one electoral promise they really can be guaranteed to keep.